Ireland: Irish Commercial Court Refuses To Suspend Patent Litigation

The Irish Commercial Court has departed from a long standing
precedent and refused to suspend national patent revocation
proceedings whilst parallel opposition proceedings are ongoing in
the European Patents Office (the "EPO").
This has the potential to result in an increase in litigating
national patents devolved from European patents in Ireland. In this
article, IP litigator Michael Finn highlights some of the key
aspects of the decision.

Some background facts - the basis for the application to stay
the proceedings

Eisai are the holders of an Irish Patent, derived from a
European Patent under the European Patent Convention, which
includes compounds that may be used to treat Alzheimer's
disease. Opposition proceedings in the EPO are currently under
appeal to the Technical Bureau of Appeal
("TBA").

Eli Lilly also initiated national patent revocation proceedings
in Ireland's Commercial Court, which is an internationally
recognised forum for fast-tracking commercial disputes. IP disputes
have an automatic right of entry to the Commercial Court provided
certain conditions are met.

Eisai asked the Court to suspend the entire Irish proceedings
pending the determination by the TBA. It relied on the leading
Irish precedent of Merck & Co Inc. v GD Searle &
Co1, in which the High Court suspended Irish
revocation proceedings pending the decision in opposition
proceedings in the EPO. Eisai emphasised the potential waste of
resources that would result from simultaneous proceedings before
two separate bodies. It also opposed the argument by Eli Lilly that
there was an urgent need to conclude the Irish proceedings, and
highlighted the lack of urgency which it alleged Eli Lilly had
demonstrated in practice, including their failure to apply for an
expedited hearing before the TBA.

Court decision

On 31 July 2018, the Court refused to suspend the entire
proceedings. The Court suspended the trial until late 2019.
However, in a departure from previous Irish case law, the Court
directed that all pre-trial steps in the proceedings should go
ahead.

Analysis

The Court concluded that under Merck the starting point
was that a suspension should be granted. The Court should then
consider whether any prejudice overrides this starting point. The
Court recognised that the approach of the English courts has
changed since Merck, in particular in IPCom v HTC
and Virgin Atlantic v Zodiac as well as other leading
cases. The Court determined that the key factors to be applied were
whether Eli Lilly had provided sufficient reasons as to why the
proceedings should not be suspended, and where the balance of
justice lies.

In deciding to suspend the trial until November 2019, the Court
was influenced by the prospect that the EPO proceedings could
potentially be resolved completely within 12 months, and the
potential waste of court resources would outweigh other
considerations. (Eli Lilly had also conceded at hearing that it
would not seek a trial in Ireland in 2019.)

However, the Court was not equally convinced it should suspend
the other steps in the proceedings.

In ruling that the pre-trial steps should carry on, the Court
considered the reasons Eli Lilly gave to oppose the suspension,
which demonstrate the types of issues that may sway the Court:

The Court was influenced by the
importance of Eli Lilly's need to make long-term, essential
commercial decisions in relation to capital investments, sourcing
raw materials, technology transfer and obtaining regulatory
clearance to expand its manufacturing facility.

The Court was mindful that, if the
pre-trial steps in the Irish proceedings did not proceed, there
could be a further delay of at least one year to the Irish
revocation proceedings if the EPO decides to uphold the validity of
the patent.

It was of "very great
importance" that the patent concerns the potential
treatment of Alzheimer's disease. The Court emphasised the
strong public interest in ensuring that the risk of any delay to a
potential treatment to this devastating disease should be
minimised.

Unlike in Merck, Eisai had
not provided Eli Lilly with an undertaking that they would not
institute infringement proceedings pending the determination of
proceedings before the EPO.

The Court was not fazed by the fact
that its ruling could be appealed to the Court of Appeal, and
pointed out the fact that significant certainty could be obtained
from its ruling because the Court of Appeal cannot typically
overturn findings of primary fact.

Finally, the Court did not lose sight
of the fact that the clinical trials may fail. The Court recognised
that the treatment may not be a success but acknowledged
"there is at least a chance it will" and that
"tilts the scales significantly against a stay of all
steps in the proceedings."

It remains to be seen whether the decision will be appealed. As
a next step, discovery and all pre-trial steps will proceed and the
suspension of the trial will be revisited in late 2019.

Conclusion

There is no 'one size fits all' approach to applying for
or opposing applications to suspend revocation proceedings of
national patents devolved from European patents. Both patentees and
challengers litigating in Ireland should be aware of this decision,
and the arguments that swayed the Court to depart from
precedent.

Footnote

1 Merck & Co Inc. v GD Searle & Co
[2002] 3 IR 614 ("Merck")

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